“We continue to be impressed with Banca Civica’s
unique business model,” Christopher Flowers, founder and
executive chairman of J.C. Flowers, said in an e-mailed
statement today. “Currently Banca Civica is in negotiations to
merge with Cajasol. When these negotiations are complete, we
hope to resume our own discussions with Banca Civica.”

J.C. Flowers agreed to purchase 450 million euros
($596 million) of convertible bonds from Banca Civica in July,
helping the group of Spanish savings banks to raise capital. The
Financial Times reported on Dec. 6 that the firm might not
invest in Banca Civica after the lender failed European stress
tests. It cited an interview with Flowers, a former Goldman
Sachs Group Inc. banker.

J.C. Flowers has been investing in the U.K. and Europe in
recent months. The buyout firm said in August it planned to
inject 50 million pounds ($79 million) into Kent Reliance
Building Society as part of a plan to acquire more customer-
owned lenders in Britain.

“Although this is not an easy time for the Spanish
economy, we remain optimistic about Spain’s fundamentals and
believe it offers attractive opportunities for investment,”
Flowers said.